Govt pumps funds into hybrid cars

The Federal Government plans to inject $35 million into a new Toyota hybrid car which would reduce emissions and save families money.

Transcript

KERRY O'BRIEN: The Prime Minister's announcement today of a deal with Toyota to start building hybrid cars at its Melbourne plant, has been heralded as a coup by the Victorian Government, local automotive industry chiefs, and union officials.

But some economists caution that the Government should be looking at other options to cut greenhouse gas emissions, and claim subsiding the industry to produce hybrids is not the answer.

The Government will allocate $35 million to support Toyota's move, and will hold talks with other car makers to try to fashion similar deals.

Heather Ewart reports.

HEATHER EWART: They were celebrating in Victoria, and little wonder, the local car industry was in for a major boost so let's try that one more time for the cameras. In fact they were jostling for the line. And just once more for good measure.

The cause for their celebration was happening here at Toyota headquarters in Japan in a less jubilant and more sedate fashion.

As Toyota displayed its latest technological wares for Kevin Rudd, the Prime Minister was claiming another election commitment had been met.

KEVIN RUDD, AUSTRALIAN PRIME MINISTER: Today what we are announcing with our friends from Toyota is that from 2010 Toyota will produce 10,000 Toyota Camry hybrid vehicles at its Altona plant in Victoria.

HEATHER EWART: His friends from Toyota will get $35 million from the Government's $500 million green car innovation fund for their efforts.

The Victorian Government will chip in too, all on the condition that Toyota invests another $100 million in research and development.

KEVIN RUDD: This green car innovation fund is all about how you assist with the start up of new technologies in Australia. It is not a production subsidy, it's about starting up a new business and that's what we set as an ambition last year. We are proud of the fact that we've been able to realise that ambition.

BRENDAN NELSON, FEDERAL OPPOSITION LEADER: We will want to know precisely how's the $35 million of Australian taxpayers' money actually going to be invested, what do Australian taxpayers get for that investment.

HEATHER EWART: Nothing forthcoming from Toyota on that just yet though.

KATSUAKI WATANABE, PRESIDENT OF TOYOTA MOTOR CORPORATION (translated): I should also add some words here at this moment in terms of the amount mentioned we are not sure in what way we would like to use that amount.

HEATHER EWART: It appears we just have to wait and see. But while the Government congratulates itself on getting Camry hybrid production in Australia, the debate is on about whether it's on the right track.

CHRIS RICHARDSON, ACCESS ECONOMICS: We've known for a long time that each country should concentrate on what it does best. Australia's not great at making cars. Other nations are great at making cars. We're good at importing them.

DAVE OLIVER, AUSTRALIAN MANUFACTURING WORKERS' UNION: I don't agree for a minute that we're not good at making cars. It's about making the right cars.

JOHN BRUMBY, VICTORIAN PREMIER: This is a green letter day. It is a fantastic day for the auto industry.

ANDREW MCKELLAR, FEDERAL CHAMBER AUTOMOTIVE INDUSTRIES: It's a very significant move by the car industry to recognise that the industry needs to be investing in future technologies and bringing vehicles to Australia, producing vehicles in Australia which have greater fuel efficiency.

HEATHER EWART: But at what cost? The Productivity Commission warned last week that hybrid car imports would be cheaper and more fuel efficient for Australian motorists than locally made hybrids.

The Government has clearly ignored this advice, deciding that jobs and boosting our technological expertise in the car industry is what matters.

KEVIN RUDD: It's very clear last year in campaigning for the last election that I didn't want to be prime minister of Australia if we didn't manufacture things any more. Very upfront about that and the fact we believe in industry policy and we believe in innovation policy.

KIM CARR, INNOVATION, INDUSTRY, SCIENCE & RESEARCH MINISTER: The primary objective here is to ensure we have high skilled, high wage jobs for Australian workers producing advanced technological means of ensuring the industry is able to cope with the challenges of the future.

HEATHER EWART: And they have the obvious barrackers.

DAVE OLIVER: We had the Productivity Commission's report just last week saying the Government should basically stand back and do nothing and if that was the case we can see what we've had over recent times about more job losses.

HEATHER EWART: But the Government also has its detractor on this one.

CHRIS RICHARDSON: There are better ways to attack the big and growing problem of greenhouse gas emissions. If we want to do something about it we have to make greenhouse gas emissions more expensive. We have to, as part of that, for example, make petrol more expensive.

Once you do that, then the public start to do the sensible things. They start to buy green cars because it makes economic sense to do it, not because governments have tipped money in by way of subsidy.

HEATHER EWART: Whether the Government likes it or not, price is going to be an issue, according to some industry experts.

GED BULMER, EDITOR, WHEELS MAGAZINE: If you look at the example at the moment, for instance, of the Toyota Prius which is the most popular and well known hybrid vehicle on the market and you compare it to a similar-sized vehicle, say a Toyota Corolla, you can get into a Corolla for around about $22,000 whereas a Prius costs you just under $40,000. So that's a fairly hefty price premium to pay for the privilege of wearing your environmental credentials on your sleeve, so to speak. I don't think a car like the Camry can carry that.

ANDREW MCKELLAR: I think pricing is yet to be determined but inevitably with any new technology we will see the price come down over time. So I expect that when we see significant production of these vehicles in Australia, they will be competitive.

HEATHER EWART: That's what the Government's counting on. On the face of it, there appears to be more chance of hybrid prices coming down one day, then Australia having an impact on nuclear non-proliferation through the latest commission Kevin Rudd has decided to set up.

He likes grand announcements on overseas trips and in this case he had ground to make up. His Japanese hosts have been somewhat miffed over his emphasis on China. But the Prime Minister's pledge yesterday to create a new international body to champion disarmament raises questions about whether his appetite for reviews and commissions is going just too far now.

GREG SHERIDAN, FOREIGN EDITOR, 'THE AUSTRALIAN': There is an emerging problem with Rudd's style of announcing these things half-baked, unprepared, on the run and with very little detail. The second reservation I have is that it's all symbol and no substance.

HEATHER EWART: Former foreign affairs minister Gareth Evans, who now heads the International Crisis Group in Brussels, has agreed to chair the commission. He at least appears to have been given more notice than former diplomat Dick Woolcott who last week was call on to examine the idea of an Asia Pacific union, just a few hours before the Prime Minister announced it.

GREG SHERIDAN: Well Dick Woolcott last week, Gareth Evans this week, he may one day run out of living national treasures to appoint. Can Dame Edna be very far away? I think you do debase the coin if you overuse it and he's in serious danger of that.

HEATHER EWART: The same rumblings are coming from within Labor ranks as well. Along with complaints that Kevin Rudd's grandiose ideas for the international stage are distracting from the main game. They're just not being aired in public.